Citizen Outreach’s Position
In February 2025, Citizen Outreach, led by President Chuck Muth, signed onto a coalition letter urging Congress to nullify the CFPB’s medical debt rule through a joint resolution of disapproval under the Congressional Review Act. The organization argued that the rule would “distort the allocation of credit” and represented “a flagrant contravention of free-market principles.”
The letter, which aligned with the Trump administration’s broader skepticism toward the CFPB, contended that the Bureau was “attempting to extend its rulemaking powers beyond the limits of its own statutory authority” and interfering with how creditors assess borrower creditworthiness.
The Court’s Decisive Intervention
On Friday, in a strongly worded decision, Judge Amy Berman Jackson granted a preliminary injunction preventing Acting CFPB Director Russell Vought from dismantling the agency. The judge determined that plaintiffs were likely to succeed in proving that the administration was engaged in an unlawful effort to eliminate an agency that Congress explicitly created by statute.
The court found compelling evidence that administration officials had issued a complete “stop work” order, terminated employees, canceled contracts, and prepared to execute a Reduction in Force (RIF) that would have eliminated the entire agency within approximately 30 days.
Constitutional Questions at Stake
At the heart of the case is a fundamental constitutional principle: While the President has broad discretion in how laws are implemented, that power does not extend to unilaterally abolishing agencies established by Congress.
“Article I, Section 1 provides: ‘All legislative Powers herein granted shall be vested in a Congress of the United States,'” Judge Jackson wrote, emphasizing that Congress—not the President—has the constitutional authority to create and dissolve federal agencies.
The judge directly addressed the administration’s argument that it was merely exercising its policy discretion:
“This case is not about how the executive exercises his discretion… What happened in February was not merely a realignment of priorities… The plaintiffs are likely to establish that the defendants stopped all work, and that they took, and plan to take, additional concrete steps to dismantle and shut down the agency entirely.”
Executive Overreach or Presidential Prerogative?
The ruling raises fundamental questions about executive authority that directly challenge Citizen Outreach’s position. While the organization has advocated for limiting the CFPB’s reach, the court found that a democratically elected President still lacks the authority to eliminate an agency created by Congress without legislative action.
Judge Jackson pointed out that if the President wants to change or eliminate the CFPB, the proper approach would be to “propose legislation to Congress that reconfigures the agency in a manner that is consistent with his policy preferences.”
Impact on Consumer Protection
The court noted significant public interest concerns, citing briefs filed by 203 Members of Congress and 22 states that outlined the CFPB’s critical role in consumer protection. According to these briefs, the CFPB has returned more than $21 billion to consumers harmed by financial institutions.
The states emphasized that they:
“cannot fulfill the enormous role of monitoring lenders and responding to consumer complaints on their own” and that the CFPB’s elimination would create “gaps in supervision that will be difficult to fill at all, let alone promptly.”
Political Reaction and Future Implications
For organizations like Citizen Outreach Foundation that have supported efforts to curtail the CFPB’s authority, this ruling represents a significant legal setback. The court’s decision directly contradicts their position that the CFPB’s actions represent unwarranted government intervention in financial markets.
This case may eventually reach the Supreme Court and could set important precedents regarding the separation of powers and the limits of presidential authority. It raises the question: How much autonomy does a President have to reshape or eliminate agencies created by Congress?
Looking Ahead
While this ruling is only a preliminary injunction, it preserves the CFPB’s existence until a final decision on the merits. The case will likely continue through the courts, with significant implications for administrative law and constitutional governance.
The judge concluded that the President remains “completely free to advance his agenda by proposing legislation” to reconfigure the CFPB, but cannot unilaterally eliminate it. This underscores a fundamental principle: in our constitutional system, policy changes that require legislative action must go through Congress, not executive fiat.
Whether this ruling represents a proper check on executive overreach or an unwarranted judicial interference with presidential authority will be debated for years to come.
This article was written with the assistance of AI. Please verify information and consult additional sources as needed.
